Why UK manufacturers should welcome new Energy Bill legislation

Posted on 18 Jan 2013

The Government has said that the Energy Bill will offer relief to industry hit hard by rapidly increasing energy costs by making energy-intensive companies exempt from costs associated with the move to a low carbon economy.

Richard Beighton, VP of Industry at Schneider Electric, offers advice to manufacturers looking to make the most of the Energy Bill. 

When the government recently announced its plans for the Energy Bill, there was widespread uproar from UK’s businesses claiming that the measures would have a detrimental effect on an already fragile economy.

However, many of the proposals offered a light at the end of the tunnel for manufacturers crippled by increasing energy costs over the last decade.

Manufacturing has long been held to ransom by sky high energy bills and operational costs.  E.On’s recent decision to increase energy prices by as much as 8.7% marked the last of the ‘Big Six’ energy companies to once again, increase the price of energy this year.

But energy intensive industries may benefit from economic support to maintain competitiveness under the new Energy Bill.

The Government has said it will create a separate incentive that means manufacturers could be paid for every kilowatt-hour they save through energy reducing measures, such as low energy lighting, smart metering and monitoring.

Further to this, additional incentives may be offered to businesses choosing to invest in energy efficient technology.

Now is the time for manufacturers to act and recoup some of the billions that have been spent on energy over the years.

While the Energy Bill won’t actually reduce the cost of energy itself, it will provide manufacturers with an opportunity to take stock of their plant’s operations, with a view to improving and reducing their consumptions and taking advantage of the financial rewards for investing in energy saving technology.

The primary route to doing this is by automating processes that currently operate manually, which leads to reduced energy consumption, thus making manufacturers eligible for the newly introduced incentives.

The most significant energy savings can be seen when an entire plant’s operations are automated. In addition to lowering energy costs during the production process, automating processes allows for maximum flexibility as it enables a system to quickly react to variable energy costs.

The price of energy can vary significantly at different times of the day, as well as geographically.  Manufacturers may be using a process automation system to manage energy consumption, but if they are using too much energy at the wrong times of the day, both costs and emissions will remain high.

Through automation, it is possible to reduce overall energy consumption and in turn, be paid for the savings – a win/win situation in terms of meeting the UK’s energy reduction targets by 2020, while helping manufacturers to free up funds to reinvest back into the plant’s overall infrastructure.

With such attention being paid to energy efficiency and many businesses already feeling the pinch of higher fuel bills, the new Energy Bill should not be viewed as a negative for manufacturers.  Rather, it is offering a chance to make the most of the incentives on offer.